Thankfully, things have been changing rapidly. Awareness for life insurtechs among millennial active shoppers has climbed almost 30% in the last 10 months<\/a>. The pandemic has brought mortality front and center, with 31% of millennials saying they were more likely to buy coverage now. Financial influencers have been flourishing on social media as consumers actively seek better control over their financial lives.<\/p>\n
I mean that literally: The life insurance industry is worth $766 billion in the U.S. alone<\/a>. By comparison, the auto insurance industry-a much better-understood behemoth-is “only” worth about $740 billion<\/a>.<\/p>\n
Traditional carriers have been slow to digitize, leaving a massive opportunity on the table. Right now, over 102 million<\/a> uninsured and underinsured Americans know they need to buy life insurance, and 42% would face hardships within just six months of losing a wage earner. But the process of getting insured-the paperwork, the medical testing, the perceived complexity, and high costs-is often a barrier.<\/p>\n
Four major consumer trends are accelerating the want for digital life insurance:<\/p>\n
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Younger generations are inherently willing to do things digitally, having grown up with technology. Over three-fourths of millennials<\/a> use their smartphones for financial transactions.<\/p>\n
Millennials are turning to social media to get financial information thanks to the democratization of the internet. Social media influencers like Humphrey Yang and Tori Dunlap have helped make financial advice and understanding more readily available. The tag #FinTok has had over 500 million views alone, with views of broader tags like #PersonalFinance reaching into the billions<\/a>.<\/p>\n
Covid-19 brought mortality to the forefront of our collective consciousness. The last two-plus years will mark generations for decades to come and have contributed to deeply shifting consumer attitudes. Six in 10 consumers<\/a> have said they have more awareness of the importance of life insurance since the pandemic began. We’ve seen this in the African-American and Black communities, which Covid-19 has disproportionately affected. They are now the most insured racial group<\/a>, with 56% owning policies.<\/p>\n
Millions of Americans are only a couple hundred dollars<\/a> away from financial hardship, and many are underinsured. Add in inflation, the rise of the appeal of the gig economy, and general economic uncertainty, and it’s easy to understand why more and more people seek financial safety for themselves and their families-especially when employer-provided life insurance disappears with your job. Suddenly, it becomes more important than ever to put financial guardrails in place in case of the unthinkable.<\/p>\n
Life insurance is a data and probability problem, which means advances in data technology should translate into advances in life insurance. We have the opportunity to evolve an entire industry predicated on data, using the advances we have available to us now-machine learning, new data sources, healthtech devices-to usher in a digital underwriting transformation that benefits everyone.<\/p>\n
Good underwriting means assessing risk properly and giving the right customer the right price at the right time. It provides a superior customer experience, but it is also the very foundation of a sustainable, enduring business in life insurance. Any digital disruptor with a claim to conquer the industry will first need to conquer digital underwriting.<\/p>\n
Technology has also enabled next-gen embedded partnerships through application programming interfaces (APIs). An increasing number of companies across banking, lending, financial planning, benefits, and even lifestyle verticals are all taking advantage by partnering with insurtechs and integrating digital insurance products right into their offerings, allowing their customers to consider their finances holistically.<\/p>\n
Disruption is an age-old story: Entrepreneur finds an industry in need of improvement, entrepreneur makes said improvements with the aid of technology, and industry tips over to the modern age as cultural norms change. It’s the story we’re seeing play out in life insurance today, to the benefit of millions of families like mine.<\/p>\n
This article was originally published on August 17, 2022 on <\/i><\/b>Forbes<\/i><\/b><\/a>.<\/i><\/b><\/p>\n","protected":false},"excerpt":{"rendered":"